Texas 2009 - 81st Regular

Texas House Bill HB634 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R3256 JTS-D
2	2	By: Hernandez H.B. No. 634
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to establishing a carbon dioxide "cap and trade" program
8	8	to enable participation in the Regional Greenhouse Gas Initiative.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle C, Title 5, Health and Safety Code, is
11	11	amended by adding Chapter 391 to read as follows:
12	12	CHAPTER 391. "CAP AND TRADE" PROGRAM FOR CARBON DIOXIDE
13	13	EMISSIONS FROM CERTAIN ELECTRIC GENERATING
14	14	FACILITIES; REGIONAL GREENHOUSE GAS INITIATIVE
15	15	Sec. 391.001. DEFINITIONS. In this chapter:
16	16	(1) "Allowance" means an authorization to emit a
17	17	certain amount of carbon dioxide.
18	18	(2) "Commission" means the Texas Commission on
19	19	Environmental Quality.
20	20	(3) "Regional Greenhouse Gas Initiative" means a
21	21	memorandum of understanding dated December 20, 2005, as may be
22	22	amended, and the corresponding model rule, as may be amended, that
23	23	establishes a "cap and trade" program in the northeast region of the
24	24	United States.
25	25	Sec. 391.002. "CAP AND TRADE" PROGRAM. (a) The commission
26	26	in consultation with the Public Utility Commission of Texas by rule
27	27	shall establish a carbon dioxide "cap and trade" program that will
28	28	limit and then reduce the total carbon dioxide emissions released
29	29	by fossil fuel-fired electric generating facilities in this state.
30	30	(b) The commission's rules establishing the carbon dioxide
31	31	"cap and trade" program shall be designed to:
32	32	(1) fully comply with the Regional Greenhouse Gas
33	33	Initiative or with another similar initiative as the commission
34	34	determines is best suited for this state; and
35	35	(2) permit the holders of carbon dioxide allowances to
36	36	trade them in a market to be established through the Regional
37	37	Greenhouse Gas Initiative or other entity as determined by the
38	38	commission.
39	39	(c) The commission and any other relevant state agency or
40	40	official shall take the steps necessary to allow electric
41	41	generating facilities in this state to participate in a market to
42	42	trade carbon dioxide allowances allocated under the program.
43	43	Sec. 391.003. AUCTION OF ALLOWANCES. (a) Rules adopted
44	44	under the "cap and trade" program must require that in 2010 at least
45	45	50 percent of all allowances issued under the program be sold
46	46	through an auction open to any person in this state who wishes to
47	47	participate. In the years after 2010, the percentage of allowances
48	48	sold through auction shall be as follows:
49	49	(1) in 2011, at least 60 percent;
50	50	(2) in 2012, at least 70 percent;
51	51	(3) in 2013, at least 80 percent;
52	52	(4) in 2014, at least 90 percent; and
53	53	(5) in 2015 and all following years, 100 percent.
54	54	(b) The proceeds recovered from the allowance auction must
55	55	be used to benefit consumers, balancing short-term and long-term
56	56	benefits. The proceeds may be used only for the following purposes,
57	57	in proportions to be determined by the commission:
58	58	(1) to promote energy efficiency and conservation;
59	59	(2) to directly mitigate the adverse effects of the
60	60	program on consumers of electricity; and
61	61	(3) to promote renewable energy technologies that do
62	62	not produce carbon dioxide emissions.
63	63	(c) The commission shall determine and specify details for
64	64	implementing the auction of carbon dioxide emission allowances,
65	65	including:
66	66	(1) the auction's design;
67	67	(2) the person to conduct and manage the auction; and
68	68	(3) the timing of the auction in any year relative to
69	69	the dates of the compliance period in the Regional Greenhouse Gas
70	70	Initiative or other market.
71	71	Sec. 391.004. AUCTION MANAGER. (a) The commission shall:
72	72	(1) engage a person to serve as auction manager that is
73	73	experienced in auction design and management; or
74	74	(2) contract with a person to serve as auction manager
75	75	that is determined by the commission to be qualified to design,
76	76	manage, and conduct the auction in a manner that assures the
77	77	efficiency of the auction.
78	78	(b) The selection process for choosing an auction manager to
79	79	design, manage, and conduct the auction shall include an open and
80	80	public request for proposals. Proposals submitted in response to a
81	81	request under this subsection must include a summary of
82	82	qualifications and experience relevant to designing, managing, and
83	83	conducting the auction.
84	84	(c) An auction manager selected by the commission may be
85	85	reimbursed only for reasonable costs incurred by the auction
86	86	manager in administering the auction as determined by the
87	87	commission.
88	88	Sec. 391.005. ALLOWANCES HELD BY AUCTION MANAGER;
89	89	DISTRIBUTION OF AUCTION PROCEEDS. (a) The auction manager selected
90	90	under Section 391.004 shall be authorized to receive, hold, and
91	91	sell carbon dioxide emission allowances.
92	92	(b) The commission shall convey all allowances to the
93	93	auction manager, who shall collect the auction proceeds and,
94	94	without further appropriation, distribute the proceeds in
95	95	accordance with Section 391.003(b) under commission oversight.
96	96	(c) The auction manager annually shall submit to the
97	97	commission, not less than six months before the start of the
98	98	auction, a draft proposal on how to allocate the proceeds from the
99	99	auction. The commission shall hold a public hearing, accept public
100	100	comment, and approve, modify, or reject the draft proposal. If the
101	101	commission rejects the proposal, the commission shall work with the
102	102	auction manager to draft an acceptable proposal.
103	103	(d) The office shall require an annual report from the
104	104	auction manager describing the auction and its results. The
105	105	commission shall make the report public and shall submit the report
106	106	to the appropriate legislative committees.
107	107	Sec. 391.006. OTHER COMMISSION POWERS AND DUTIES RELATED TO
108	108	CLIMATE-CHANGING SUBSTANCES. The responsibilities created by
109	109	establishing a carbon dioxide "cap and trade" program are in
110	110	addition to all other responsibilities imposed by any other law or
111	111	rule and do not reduce any authority of the commission, including
112	112	the authority to adopt standards and regulations necessary for this
113	113	state to join and participate in a multistate program, at any stage
114	114	in the development and implementation of the program, intended to
115	115	control emissions of carbon dioxide or other substances that are
116	116	determined by the commission to be damaging or altering the
117	117	climate.
118	118	SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
119	119	amended by adding Section 39.927 to read as follows:
120	120	Sec. 39.927. CARBON DIOXIDE "CAP AND TRADE" PROGRAM. The
121	121	commission, in consultation with the Texas Commission on
122	122	Environmental Quality and the attorney general, through the
123	123	commission's authority under this chapter, including the authority
124	124	to review rates, prices, and schedules, shall adopt rules that
125	125	fully implement the carbon dioxide "cap and trade" program
126	126	prescribed by Chapter 391, Health and Safety Code. The commission
127	127	may adopt rules and enter any orders that ensure that the carbon
128	128	dioxide emissions associated with the generation of electric power
129	129	serving the customer load of this state are treated on a
130	130	commercially comparable basis regardless of the location of the
131	131	power stations operating to serve that load.
132	132	SECTION 3. Not later than January 1, 2010, the Texas
133	133	Commission on Environmental Quality and the Public Utility
134	134	Commission of Texas shall adopt rules to implement Chapter 391,
135	135	Health and Safety Code, as added by this Act.
136	136	SECTION 4. This Act takes effect September 1, 2009.